If price was the only thing that mattered when purchasing real estate, sales contracts would only be a few paragraphs long. But in reality, sales contracts can be ponderous instruments exceeding thirty pages of legal language.
The terms and conditions of a transaction are equally as important as the price that is being paid.
Terms such as the length of an inspection period, and the conditions of the resolution process if defects are discovered can add a tremendous amount of value over an “as-is” purchase.
Even the projected closing date can affect the value of the property. If a buyer needs the property in 30 days, but the seller needs 90 days to move, the value of the property may become diminished to the buyer.
Contingencies such as ability to obtain financing or the appraised value of the property meeting the purchase price can add peace of mind and added value to the purchaser.
So when a buyer or a buyer’s agent calls and asks if a seller will take “X” dollars for their property, the question is too vague for a direct answer. Until one examines all the terms and conditions of an offer, it is impossible to determine the true bottom line of the deal.
I have often seen buyers pay more and add value to their purchase by getting much more in return in concessions from the seller.
It’s not rocket science; it’s the art of the deal!
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Richard, so true. Terms, conditions, length of closing can effect the value of the property. The best price isn't always the best deal.
Hi Richard,
I find it amazing that the potential buyers or their agents have the edacity to call and ask if the seller will take X amount of $$$... It shows that it's a "buyer's market" at that point, otherwise we would all have several multi offers at the table.. ;>))
Richard, there is more to it than just what the market will bare...terms and conditions can be as important to one or both sides.
Good M orning Richard,
Thanks for the excellent post. Many buyers are looking for a "Steal", not realizing that transactions not properly researched and structured could turn into nightmares. Have a great day.
Price is not the end all. When you get possession, the condition of the property, being able to land boxes, use the garage earlier than closing, a low market rent until closing which saves moving twice. All the owner financing, items left and details of the sale make them unique, have value beyond the sticker price.
Today, buyers are more motivated by price. That's why they are chasing short sales, regardless of the fact that it can take several months and still may not close, and that it's an as is sale. They are under the impression that they can negotiate with the bank to make repairs or renegotiate price.
Buyers agents need to educate them
Richard.....buyers and sellers need to understand "the art of the deal".....there are so many factors and each transaction is so different....volumes can and have been written on this topic....
Richard
In Florida we have a box to check off on our listing agreements that allows us to not even present a verbal offer. When they call and ask "will they take . . ." there is always something else hidden in an addendum costing the seller more!
Nice perspective, Richard!!!
Good morning Richard,
You are exactly right! Price is not the only factor in a coming to terms on the price of a home. Each transaction is different due to wants and needs of both the seller and buyer. I like Barbara's comment the seller and buyer needs to understand "the art of the deal" as well as their respective agents!!
Great post, and so true! There are many more items to consider when looking at an offer that could affect the seller!
Absolutely Richard, "it is the ART of the DEAL" and price should not be the only factor in buying a home! Well said! ~ Susan
Hi, Richard:
It's hard to avoid getting stuck on the offer price, but so many other factors can be negotiated to make the deal work.
Cheers,
Robin
It's just like "shopping" for a loan...beware the terms and conditions, always! Great reminder.
Richard - so many buyers are short sighted with price the only thing that they consider. Add seller contributions, etc. and there are so many things that contribute to the "deal"
Buyers and sellers rarely understand the art of the deal, nor do they have any appreciation for the thought process of the other side of the transaction. The assumption is usually that if I don't get everything the way I want it, then I am not getting a good deal and therefore I don't want to do it. Losing sight of the objective (buying a house or selling a house) is the first step on the road to termination.
Richard some people forget that there is just so much more to an offer beside the price. People sometimes just get stuck there and can't get beyond it.
I tell my clients this same thing all of the time that there are many facets to a transaction and as you said, price is not always the deal maker or breaker.
Great post Richard....How many times have we all heard a FSBO say that they could save thousands by handling their sale themselves ,only to lose thousands by accepting a buyer's contract with conditions that reduce their bottom line drastically.
Great post Richard. And well worthy of that gold star! All the terms, not just the price, need to be considered when reviewing an offer.
Richard, as you easily put it you had better have an agent that knows how to look at the whole package...thanks
I also think most deals are influenced by the expectations. It should have an element of value perceived by all participating parties.
Well said, Richard. A deal is so much more than a dollar amount.
Hi Richard, very well put. Personaaly, I'll pay more for a good car if it gives me the safety features I desire, more for clothing if it wears longer and more for a house if the seller will give me better terms that give me more flexibility.
Richard I just wrote a blog on having doubts about hiring a Realtor. One of items I featured especially was the negotiation. For the buyer getting the offer accepted is one thing but, as you noted there can be reams of paper trying to settle terms. Like the post.
Ann
Richard, this is great point. There were a few discussions about low-ball offers lately, and it seems that contingencies as parts of the process oftentimes slip out of the discussion. Only the offer price drags attention. Yet the combination of both (price AND contingencies) can work out very well for everybody involved in the end...
I can still see the face of the prospect who lost the home he wanted. After it closed, he stopped by and said,
"I don't get it. I offered more than the closing price." Yes, but the people who got the home offered cash, a quick closing and no concessions from the seller. It's a no-brainer.
Sorry not to get back to everyone sooner, but I had an eraly morning appointment that leaves me a lot oc catching up to do!
Thanks for all of the wonderful comments!
Richard - this is a great post. I always think of it as "Time, Terms or Tender (money)". From my software engineering training, we would get 'time, quality or price' and you only get two. Similarly, the best deal is where you get the two out of three that best fit your buyers goals. If it's time and tender, they will need to be willing to give in on terms.
nice points... great reminders
Richard, so many of the buyers get hung up on buying a "deal" they lose site of the items you mentioned.
Hi Richard, great post. The clients art of the deal can always be worn with rose colored glasses. We as agents have to know the compete package because deals are not always what they can seem to be. Thanks for sharing.
Hi Richard, great post. The clients art of the deal can always be worn with rose colored glasses. We as agents have to know the compete package because deals are not always what they can seem to be. Thanks for sharing.
Yes Richard, we agree with all your points. Although a seller/and or buyer, may think its price, price, price, there are so many variables in buying and selling real estate that you have to look beyond the price and negotiate the best "DEAL!"
Yes, price is important but so are terms and conditions and a plethora of other details. Price alone does not tell the complete story.
Whats that old saying Richard, there more than one way to skin a cat?
More pearls of wisdom to live by...there's definitely a life lesson in this post!!! Excellent!
Richard, great post, yet again! If its not in writing here, it really means nothing. And I certainly can't answer that question, will your seller take less. I hate when I get asked that.
Terms were and are still a value to a transaction that were lost in the storm of a false market a few years ago.
The "art of the Deal" is something many consumers do not understand as we do it on a daily basis and our expertise is often overlooked or under valued.
Richard you are so right "The terms and conditions of a transaction are equally as important as the price that is being paid
A lot of buyers concentrate on price these days. They are looking for a steal not a deal. Terms can be just as important! Great post Richard as always. :)
So true. It is often not the highest price that gets the house in a multiple bidding situation, but the best terms.
Yes, Richard. I always tell people that sometimes PRICE is the easiest thing to negotiate. There are so many other moving parts of the deal with individual motivations and needs, sometimes from several other parties. You've got to work you way through the deal with patience and your eye on the big picture.